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A notebook from MSI portends the crush of lower-cost, Intel-based MacBook-Air-like laptop designs to come.

The MSI X-Slim series herald Apple MacBook Air-like laptops without the luxury laptop tax

(Credit: MSI)

As I've written before, consumer ultra-low-voltage (CULV) chips will arrive in earnest this summer. The X-Slim X340 from MSI (Micro-Star International) is using the ULV SU3500, a precursor to lower-cost CULV Intel chips to come.

(Note: On April 19, Intel cut prices (PDF) on a wide range of processors. Though the SU3500 didn't see any cuts, the prices on its low-power cousins, the SL9400 and SU9400, were reduced 10 percent and 9 percent, respectively.)

What is CULV exactly? Well, one thing it's not is the Netbook-centric Atom processor: the 1.4GHz SU3500 is based on Intel's higher-performance mainstream Core 2 architecture. But like the Atom, it's a single-core chip. Single core means low power. In this case, the SU3500 draws only 5.5 watts, more than the Atom but a fraction of the dual-core mainstream Intel mobile chips rated at 25 and 35 watts. It also comes in a small 22mm chip package.

And what does all this mean? Better performance than Atom-based Netbooks. And in a well-designed system, longer battery life than a mainstream laptop.

Oh, and lower prices than luxury laptops like the Apple MacBook Air and Dell Adamo, which start at around $1,800. The MSI X-slim 340 with the SU3500 was launched this week in Japan and the higher-end version starts at around $1,000. U.S.-based reports say it is priced at $1,100.

The ultra-thin HP Pavilion dv2 laptop powered by AMD's Athlon "Neo" chip is also in this price range. AMD CEO Dirk Meyer said Tuesday that the single-core Neo processor will get a dual-core sibling dubbed "Congo" by summer.

Let the low-cost laptop competition begin.

Advanced Micro Devices' server roadmap is solid but its mainstream mobile lineup is languishing.

AMD's six-core "Istanbul" processor release was moved up to June

(Credit: AMD)

First, the good news. These days AMD is walking the talk. This is a radical change from the AMD of 2007-2008, which always seemed to have a hopper full of Intel-vanquishing paper processors that, if they did materialize, disappointed.

Fast forward to AMD's Tuesday earnings announcement, when the company said it was actually moving up the introduction its most sophisticated processor, the six-core Istanbul, to June.

And AMD has proved its silicon mettle at large server customers such as IBM and Sun Microsystems--the latter's executive vice president John Fowler had nothing but praise for AMD processors in high-end Sun server systems.

In a "Global Webcast" on server technology Wednesday, Patrick Patla, a vice president in AMD's server and workstation business, revealed a strong roadmap, saying that 8- and 12-core "Magny-Cours" processors will appear in 2010. "We're currently working on new processors which we expect will deliver more than 35 times the performance of the original single-core AMD Opteron processor released in 2003," Patla said in a statement.

Intel, of course, will also bring out many-core processors, but AMD is keeping pace, and, according to people who should know, like Sun's Fowler, maybe more than keeping pace.

Now, the bad news. This post today on CNET's Crave blog says it all: "One of our biggest issues with HP's Pavilion dv3z was its AMD processor, keeping it from beating out the performance of comparable 13- and 14-inch laptops with Intel Core 2 Duo CPUs." This is, by no means, the first review that expresses this sentiment. In short, AMD mobile platforms consistently come up short in the high-profile, burgeoning laptop market. Will AMD close the gap in 2009?

Maybe one answer to that question is AMD's Neo chip that powers the low-cost, ultra-thin HP Pavilion dv2 laptop. More than a Netbook but less than a mainstream laptop, this kind of sleek mobile device could eventually eclipse the high-end Netbook segment.

AMD CEO Dirk Meyer said Tuesday that the single-core Neo processor will get a dual-core sibling dubbed "Congo" by summer. A dual-core processor in this low-cost, MacBook-Air-for-the-masses category is a compelling proposition. AMD needs to stay ahead of the game, especially when Intel brings out chips for this category in the May-June timeframe.

Intel Chief Executive Paul Otellini said low-cost, ultrathin laptops with future Intel processors will be a big trend, a development that could upset the Netbook cart.

HP Pavilion dv2: harbinger of things to come

(Credit: CNET Reviews)

During Intel's first-quarter earnings conference call Monday afternoon, Otellini had a surprising amount to say about Intel's upcoming consumer ultra-low-voltage (CULV) processors, designed to fit into future ultrathin laptops that are expected to be priced significantly below $1,700-and-up luxury laptops such as the Apple MacBook Air and the recently-introduced Dell Adamo. The category of upcoming CULV-based laptops has been described by some observers as the MacBook Air for the masses.

CULV chips will be based on mainstream Intel chip designs, such as Intel's Core architecture, differentiating them from the lower-performance Atom processor, which powers low-cost Netbooks.

Otellini said in prepared remarks during the conference call that Intel "looks forward to the launch of our consumer ultra-low-voltage products, which will enable many new sleek thin-and-light notebooks at very compelling price points."

And later in the conference call, responding to an analyst's question, he said: "The big trend in notebooks this year, starting mid-year, is likely to be very well designed thin-and-light notebooks using the CULV or ultra-low-voltage products."

Otellini continued. "And I think you'll see those at very attractive price points. Up to this point in time, those machines have been sort of executive jewelry and I think they'll hit mainstream consumer price points."

He said that these notebooks will be different from Netbooks. "And we're expecting (there will be) a more clear distinguishing set of characteristics between Netbooks and notebooks," he said.

One issue likely to emerge is, why would anyone buy a $500 Netbook, like the HP Mini-Note 2140, if these more powerful, sleek laptops are available?

The Intel CEO also said that new versions of the Atom processor are coming and mentioned a dual-core version. Intel currently offers a dual-core 330 Atom model for Nettops--a low-cost desktop PC category--so this would presumably be in addition to this sole dual-core Atom offering.

Otellinli also said that the future Larrabee graphics processor shown at the Intel Developers Conference in Beijing last week was a "high-end version" and added that "there's obviously other versions that have far fewer cores for different price points. What you saw is the 'extreme' version, let me put it that way." Volume shipments of Larrabee are expected early next year, he said.

Here's a radical idea: a 2009 Apple computer with an AMD processor.

Improbable?

(Credit: Apple, AMD)

Maybe this isn't in the cards, but it should be. Especially in light of Advanced Micro Devices' upcoming ultraportable platforms.

I see an upscale Netbook-like Apple computer with, let's say, a slightly smaller form factor than the Apple MacBook Air. Maybe an 11-inch or 12-inch design packing low-power (and relatively inexpensive) AMD Yukon or Congo silicon. This would not be a Netbook clone--and would offer much better graphics silicon than a Netbook--allowing Apple to sufficiently differentiate itself.

Or what about an Apple laptop with an upcoming AMD 45-nanometer mobile processor plus ATI Radeon HD 3600-level graphics that slots below the MacBook Pro? I'm sure Apple could find a head-turning way to implement this that would set it apart from the Intel-based hordes.

Or: AMD's 45-nanometer Shanghai or Phenom II in a Mac Pro? Maybe this concept is beyond the pale for the marketing folks at Apple, but it shouldn't be.

And Apple has demonstrated it can buck conventional processor politics. Intel's newest ultra-low-voltage (ULV) Core 2 Duo processors were offered by all the top-tier laptop vendors as an Intel bundle--Intel processor and Intel integrated graphics--until Apple decided to "think different" and up the ante with an Nvidia GeForce 9400M-based chipset.

Needless to say, AMD needs to go where Intel hasn't gone before in 2009. Last year was not a good year for AMD. Aside from its financial difficulties and the spinoff of its manufacturing operations, it couldn't muster a respectable challenge to Intel in server, desktop, or mobile chips. AMD's newest Shanghai processor for servers and Phenom II for desktops should be competitive with Intel offerings, but don't expect any tectonic shift in market share.

So AMD should be targeting Intel vulnerabilities--some of them self-imposed because of Intel's rigid processor segmentation in some areas--as well as exploiting its self-proclaimed advantage: AMD is the only one of the Big Three PC processor suppliers (the other two being Intel and Nvidia) that makes both CPUs and GPUs.

AMD's Fusion strategy should be more than a marketing mantra. Some unsolicited advice: find a truly unique way to fuse together the strengths of the CPU and GPU before Intel or Nvidia beat you to it.

A clash is brewing as PC and cell phone chip suppliers vie for new designs that fall outside traditional product categories, an analyst said in a research note Wednesday.

Asus 10-inch Eee PC 1000

(Credit: Asus)

Doug Freedman, a chip analyst at AmTech Research, said the "line between cell phones and PCs is clearly blurring" and that consequently "PC and cell phone food chains will battle for market share in these new classes of devices." He calls this the "big bang between PCs and handsets."

This will happen as more tweener products emerge. "New product categories such as Netbooks, MIDs (mobile Internet devices), and smartphones all lie in the spectrum between the traditional PC and handset product categories," he wrote. "Cell phones are increasing in screen sizes, computational power and capabilities, while PCs are seeing declines in screen sizes and increases in connectivity."

This may present problems for chip suppliers as they rush to build inventory for these newfangled devices, resulting in an oversupply for device categories that don't succeed. "It's a safe bet that we'll end up with losers," he said in an interview. Moreover, there will be lower-than-expected gross margins (a crucial indicator of profitability) for some of the chips that go into these products, according to Freedman.

While the Netbook is considered a successful tweener product, it exemplifies a category that may be facing a reality check as the novelty wears off, resulting in an oversupply problem, he said. Intel says it has seen strong demand for the Atom processor on the back of the popularity of Netbooks but there are signs that demand has started to ebb, according to Freedman. This has resulted in cancellations from device makers for chips that go into Netbooks, Freedman said.

Netbooks have been popular because of their novel design--what is essentially a very small, very-low-cost (below $500) laptop, a category that hasn't existed to date. Ultra-small laptops (such as the MacBook Air and Toshiba Portege) have traditionally commanded a very stiff premium, typically going for more than $1,500.

Contrary to what Intel has been saying, Freedman wrote in the research note that the "initial generation Netbook solutions may not succeed in emerging/low income markets as users find feature and performance sacrifice in Netbooks (i.e. 5- to 8-inch screens) unacceptable for a networked family."

He added that Intel will also continue to be challenged by cannibalization of Netbooks: that is, Netbooks will take market share from traditional notebooks.

Down the road, Freedman writes, "we do not expect the PC and handset to converge into a single 'holy grail' device." PC and cell phone makers will continue to build devices that try to bridge the gap. Apple's iPhone is an example of a device at one end of the spectrum, while the 10-inch Asus Eee PC Netbook addresses the other end.

"We expect most users to continue to require two devices: one large form factor device and one small form factor device," he said in the note.

Updated at 9:00 p.m. with additional comments on Netbooks at bottom.

In case you missed it, Advanced Micro Devices is passing on Netbooks. At least as Intel and its partners have defined the category.

AMD thinks that ultrathin 13-inch designs such as the MacBook Air address a more viable market than what it calls mininotebooks.

(Credit: Apple)

In fact, a lot of the media outlets missed this point completely, insisting that AMD is going to go head-to-head with Intel on Netbook processors--apparently because it satisfies a journalistic boilerplate that AMD must, just must, have a direct response to Intel's Atom.

Just to set the record straight, here's what AMD Chief Executive Dirk Meyer said Thursday: "We're ignoring the Netbook phenomenon--just thinking about PC form factors above that form factor."

I think that is a pretty unambiguous statement. But if that wasn't clear enough, here's what Bahr Mahony, director of notebook product marketing at AMD said: "We're going to offer the Congo and Yukon platforms as an alternative (to processors and chipsets for Netbooks). There are a fair number of people that are not satisfied with the experience they're getting on these mininotebook platforms." (AMD uses the terms Netbook and mininotebook interchangeably.)

(Note that AMD has also said it will not enter the market for mobile Internet devices, or MIDs, another sign that AMD is pursuing a different course than the one Intel has charted with Atom.)

In an effort to underscore his doubts about Netbooks, Mahony added that the dissatisfaction with Netbooks "has been exhibited by the high return rates that have been seen on these mininotebooks" in Europe.

Asus or Acer may have something to say about that, but at the very least, this offers a fresh perspective on this possibly overhyped category.

And AMD spokesman John Taylor said Thursday that AMD is specifically not targeting Netbook designs. That is, those designs with an 8- to 12-inch screen.

AMD's strategy seems solid, in my opinion. Go for a segment that is bigger and better than Netbooks. The ultraportable category (the MacBook Air being the best example) is full of attractive but expensive designs. Why not work with PC makers to offer an ultrathin, ultralight, full-featured 13-inch notebook that is priced a lot less than $1,800? Why not $600 or $700?

In addition to the conventional criticism of Netbooks (small screens, tiny keyboards), an underrated fact is that many users eventually get the feeling that they're stuck with an underpowered laptop.

And being underpowered often hinges on lackluster graphics. In a conversation Thursday with Pat Moorhead, vice president of advanced marketing at AMD, he pointed to the graphics capability of AMD's upcoming Conesus CPU, which will use ATI's RS780M graphics: better graphics and better user experience overall.

The MacBook Air offers probably the best proof of this thinking. Apple (which, if you haven't noticed, doesn't offer a netbook), originally went with Intel's integrated graphics in the Air, but due to customer dissatisfaction with graphics performance, it added Nvidia GeForce 9400M graphics to its newest models.

Delivering a more powerful dual-core processor (such as AMD's Conesus) for this segment would also turn some heads and offer a more full-featured experience. Intel will be the first one to tell you that Atom is underpowered for many applications.

Are AMD customers clamoring for Netbooks like Intel customers are? "Frankly, I don't get the same answer when I talk to the customer base," AMD's Meyer said Thursday. Time will tell whether the CEO's strategy is right, but it offers a well-thought-out alternative to the Netbook as we know it.

Additional comments:
As a point of clarification. A Netbook is not a thin notebook. AMD has stated it will pursue the latter market. (Whether this pans out or not is another question. Consumer tastes and time will ultimately dictate the form factor.) Thin notebooks are typically full-featured with relatively large 12-, 13- or 14-inch screens. Netbooks, by contrast, are tiny in size (just visit a Best Buy: Asus Netbooks are almost invisible next to a standard notebook) and use low-power, low-performance Atom processors. The Netbook category now exists because of the stark difference in form factors (and price). And the market has borne this out. The Netbook category is defined, to a large extent, by the Atom processor, which is architecturally very different than the Yukon and Congo platforms that AMD will launch. That's why CEO Meyer and others at AMD are going out of their way to draw a distinction between Netbooks and the type of design that AMD will pursue.

Updated at 3:20 p.m. PST throughout with clarification of Yukon and Congo technologies

An AMD-based Netbook? Maybe, maybe not.

On Thursday at an analyst meeting, AMD disclosed "Yukon" and "Congo"--the names that AMD is giving to its silicon technology, due in 2009, that will target the "ultraportable" market. (The meeting was streamed live from the event.)

AMD is targeting Yukon at ultraportable designs like the Voodoo Envy 133 notebook

(Credit: Hewlett-Packard)

The company is being very careful to parse this as a more full-featured ultraportable PC play not a strict Netbook play.

The ideal ultraportable form factor is a MacBook Air-style design: very thin with a 13-inch screen, according to AMD spokesman John Taylor.

In short, AMD is not offering an enthusiastic endorsement of the Netbook market. "The target is the slim form factor with a larger screen. Not a 10- or 11- or 12-inch screen," Taylor said. He quickly added that smaller Netbook-style designs may appear but repeated that this is not the emphasis.

Why? AMD's approach is to deliver "a full PC experience," Taylor said. "That's not what you can say about some of the Netbook-type products on the market today," he said. AMD will do this by tapping into the graphics chip technology from its ATI unit, according to Taylor.

"Customers are not satisfied with the experience on mini-notebooks," said Bahr Mahony, director, notebook product marketing at AMD, speaking during the analyst meeting on Thursday. AMD refers to Netbooks as mini-notebooks. Bahr said data shows that there are high return rates in Europe where many consumers have been snapping up Netbooks.

AMD's goal, therefore, is to offer a "more satisfying" experience on higher-performance laptop designs like the MacBook Air, Mahony said.

The tech specs that AMD is currently disclosing for Yukon/Congo are a sub 25-watt platform (processor and chipset) with single and dual-core options. Currently, its mainstream Turion processors operate at over 30 watts. (Correction: the "sub 25-watt" Yukon/Congo refers to both the processor and chipset.)

AMD also showed a Congo platform

AMD roadmap shows future Conesus and Geneva ultraportable chips

(Credit: AMD)

AMD Congo and Yukon ultraportable platforms

(Credit: AMD)

AMD showed an ultraportable dual-core 65-nanometer chip dubbed "Conesus" on its road map. This will fall under the Congo platform umbrella. Huron will have one core and fall under the Yukon platform. After this, a 45-nanometer Geneva chip will debut in 2010. (Correction: Conesus falls under the Congo platform.)

Taylor also offered this thinking: Intel's Netbook strategy is somewhat restrictive in that designs are small, at least under 12 inches and--to date--usually under 10 inches. Without mentioning Intel by name, he said this restriction is to "protect segmentation of your business." In other words, if Intel delivers a chip that addresses larger designs it would cannibalize Intel's more profitable mainstream mobile processor lines.